Feb. 1 (Bloomberg) -- Cowen Group Inc., the securities firm
run by Peter Cohen, plans to buy Dahlman Rose & Co. in a stock
transaction to expand into natural resources.

Cowen is adding about 100 people to its staff of 550,
Jeffrey Solomon, head of its Cowen & Co. unit, said today in an
interview. He declined to say how much the firm is paying for
Dahlman Rose. Both are based in New York.

Smaller firms are looking for partners amid a slowdown in
stock trading that led to the closure of rivals ThinkEquity LLC,
Rodman & Renshaw LLC and WJB Capital Group Inc. last year. This
deal will expand Cowen into new industries while allowing
Dahlman Rose’s bankers to take advantage of its new owner’s
ability to help companies issue debt, Solomon said.

“The challenge for some of the smaller firms like Dahlman
is it’s a difficult business to scale on your own,” said
Solomon, 46. The deal “enables both sales forces to really get
the best of both worlds.”

Cowen, an investment-banking, trading and asset-management
firm, has seen its stock drop 55 percent since 2009 to $2.69.
The firm lost $14.5 million in the first nine months of 2012 and
posted losses in each of the previous five years, according to
data compiled by Bloomberg.

“We have to evolve into something different, which we are
working very hard at doing,” Cohen, 65, said today in an
interview with Bloomberg Television’s Stephanie Ruhle. “We have
a very strong asset-management business. We are very active in
investing our own capital.”

Natural Resources

Dahlman Rose specializes in energy, metals and mining,
transportation, chemicals and agriculture, while Cowen’s bankers
mostly cover health care, technology, media, aerospace and
defense, according to a statement today from Cowen. The deal is
expected to be completed during the first quarter.

“The fit is just like a hand in a glove,” Solomon said.
“There’s zero overlap.”

Cohen, a protege of former Citigroup Inc. CEO Sandy Weill,
was head of Shearson Lehman in the 1980s. He left the company
after losing a bidding war for RJR Nabisco Inc., which was
bought out by KKR & Co. in 1989 for a then-record $30 billion,
according to Bryan Burrough and John Helyar’s book “Barbarians
at the Gate.”